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Wednesday, June 6, 2012

Impact investing — Socially responsible investing not just for the wealthy

SANTA MONICA, Calif. (MarketWatch) — Good for you, Morgan Stanley Smith Barney! You are paving the way for Wall Street to get into the impact investing space.By launching your Investing with Impact Platform, you can change the world — literally.By targeting risk-adjusted financial returns as well as positive environmental and social impact, you are telling investors they can do well and do good at the same time. The idea, I know, is to help clients align their financial goals and their personal values, and by empowering your financial advisers with a broad range of investment options you are taking the lead on a whole new investment class.As you readily admit, the concept of integrating social and environmental impact into investment decisions is not new, but its growing importance has led to greater opportunities for investors; nearly one in eight dollars under professional management in the U.S. — or about $3.07 trillion — follows investment strategies that consider corporate responsibility and societal concerns.Indeed, a focused effort to meet investors’ desire for investment opportunities that center on positive social and environmental impact without sacrificing financial performance potential has been a program in waiting. It’s high-time an institution such as yours has stepped up to fill this void.

Bankers fear they will get otu of job. They don't have enough with the employer of last resort: colleges (students loans). They now have to capitalize on social movements as the 99% sees them for what they are for: useless rentiers extracting wealth from the economy.

It's sometimes more pragmatic to use existing customary venues, even though they may be less efficient and effective in the broader context than is desirable.

Probably impact investing is one of those areas. Let's face, under currency institutional arrangements, there's going to be a "vig." And we are justs beginning to question those arrangements on any significant scale, let alone change them.

The world needs to act quickly on this, and Morgan Stanley is only getting involved because there is significant demand building. That's a good sign of positive change.